The cartel of oil-producing countries will have $1 trillion (£600bn) in
revenues for the first time this year, benefiting from high prices that may
cause a "double-dip recession".

Forecasts from the US government show that the Organisation of Petroleum Exporting Countries (Opec), whose key members include Saudi Arabia and Iran, will collect a third more in revenues because prices have averaged $111 per barrel this year.

But Fatih Birol, chief economist of the International Energy Agency, said that the current price of $120 per barrel could be the catalyst for a global economic crisis on the scale of the one experienced in 2008.

"If you don't see any softening of the prices, there is a risk of derailing the economy, of a double-dip," Dr Birol told the Reuters Global Energy and Climate Change Summit. "We all know what happened in 2008. Are we going to see the same movie?"

Oil prices fell nearly $3 in London to $117.30 and more than $5 in New York to $94.84 on worries about the faltering global economy.

However, economists believe the price is still at a level near to tipping the global economy back into a downturn. To combat sky-high oil prices, the US is reported to have attempted an ambitious swap with Saudi Arabia in the past month.

It is understood that US and Saudi officials met to discuss exchanging high-quality crude oil stored in the US emergency reserve for heavier, low-quality oil from Saudi Arabia.

The idea involved shipping some of the light low-sulphur – or "sweet" – crude out of the US strategic petroleum reserve to European refiners, who needed it because the civil war in Libya has cut off shipments. In return, Saudi Arabia would sell its heavier high-sulphur – or "sour" – crude at a discount back to the US.

However, the deal fell apart as Riyadh ultimately proved unwilling to subsidise European or US customers by discounting its crude prices below market value.

Saudi Arabia and its Gulf neighbours last week voted for an increase in production from Opec members in an attempt to dampen prices. However, the key meeting of the cartel fell apart after fellow members such as Algeria, Iran and Venezuela refused to back higher output.

Observers say Opec's failure to agree on production increases is almost irrelevant. Saudi Arabia is one of the only nations capable of boosting its production and it already ignores production quotas.

Opec's 12 members are already producing 28.9m barrels a day, substantially higher than the 24.8m that was officially agreed in December 2008. Saudi Arabia is likely to boost output by up to 1m barrels per day over the coming months.

Abdalla El-Badri, Opec secretary-general, claimed on Wednesday oil at this year's average of $111 per barrel is "reasonable". He added there was no need for the International Energy Agency to release emergency stockpiles.

"These are reasonable, averaged for the year," Mr El-Badri said. "One hundred dollars will not really affect the world economy. If a customer goes back to any of our member countries asking for more oil, I'm sure they will get it."